Mortgage lenders attracted attention after the Bank of England said mortgage lending grew 1.1 percent in March, but loan approvals for new homes declined to an adjusted 98,000 from 100,000 in February. The figures show remortgage activity remains strong, but home buying is easing off.

Shares of lenders including HBOS (HBOS), Abbey National (ANL) and Bradford & Bingley (BB) declined around one percent.

"The mortgage lending numbers have had an impact," said Anais Faraj, equity strategist at Nomura in London. "The lenders outperformed in the last month; HBOS has had a huge run. Even the ardent bulls must be wondering if the good news is already priced into these stocks."

The pharmaceutical stocks continued their run amid encouraging outlooks for sales. Shire Pharmaceuticals
SHPGY
(SHP) was up 9 percent in London after the drugmaker posted an 11 percent rise in first quarter profit to $63 million and said sales rose 28 percent $304 million.

Shire said Adderall sales rose 86 percent over the year-ago to $115.2 million, and added that "competition from recent entrants to the Attention Deficit Hyperactivity Disorder (ADHD) market has not had a significant impact."

Shire raised its sales outlook for the year, and said it now expects revenue growth in the mid to high teens for the year, but left unchanged its forecast of high single digit to low double digit earnings per share growth.

Cordiant (CRI) surged 73 percent to 13p after the group confirmed it has secured financing until July 15, and that it's reviewing its options in the wake of a profits warning on Monday after losing key client Allied Domecq (ALLD).

"The Board of Cordiant is actively investigating alternative strategic options for the Group, in addition to the disposal program previously announced, which is progressing well," it said in a statement to the London Stock Exchange.

The group said revenue in 2002 on an underlying basis dropped 11.3 percent to 532.7 million pounds. It reported a pre-tax loss of 228.2 million pounds vs. a 270.8 million loss a year ago. Shares also rose on relief that the results were posted. Cordiant this week had said it might delay the release of its results, triggering a stock-trading suspension.

Imperial Chemical Industries (ICI)
ICI, +0.45%
shares tumbled 6.9 percent after it announced it was cutting costs through a restructuring concentrated in its paints division that will lead to a exceptional charge of about 53 million pounds and the loss of over 700 jobs.

"Divestments are not attractive at this point in time, due to the recent underperformance of businesses and potential disposal costs. Secondly, we believe that significant scope exists across the whole Group for cost reduction and performance improvement," it said.

ICI said first quarter sales declined 4 percent from the year ago to 1.4 billion pounds and that pre-tax profit before goodwill and items declined 14 million pounds to 52 million.

Looking ahead, ICI said: "The economic environment for the rest of 2003 is, at best, uncertain, and it is clear that ICI cannot rely on improved market conditions to aid profit growth."

Figures released Thursday suggest that the pace of the decline in manufacturing in the U.K. is slowing. The Chartered Institute of Purchasing and Supply said its Purchasing Managers' Index rose to 48.3 in April from 46.3 in March. A reading above 50 signals expansion in the sector.

"At last, some good - well, less bad - news from the UK manufacturing sector... the pace of decline has slowed," said Andrij Halushka, economist at the London-based Center for Economic and Business Research.

"It looks like the Bank of England's Monetary Policy Committee will be under less pressure to cut interest rates in May, although we still expect such decision to be made relatively soon," he said.

Shares of London-listed brewer SABMiller (SAB) eased 3.5 percent amid a report in the Financial Times that the company is the front runner to buy Peroni, the family-controlled Italian beer maker.

The deal, seen valued at 600 million euro, could be reached within weeks, the report said. Belgian brewer Interbrew remains the favorite to buy, the report said. Reuters reported analysts expect Britain's Scottish & Newcastle (SCTN) may also be considering Peroni.

In other corporate developments, U.K. pharmacy chain owner Boots Group (BOOT) said Richard Baker has been named chief executive with effect from Sept. 15. Baker, 40, is currently chief operating officer of Asda, the Wal-Mart
WMT, -0.37%
owned supermarket chain. Boots said Nigel Rudd has been named Chairman, effective from Sept. 15.

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